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ACC201 TMA3 QUESTION AND ANSWERS

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1).A normal accounting year includes the following

(A)Absolutely 12 months
(B)Commencement of business
(C)Year end consistency
(D)Continuity of basis period

Ans: Commencement of business



2).General charges include the following EXCEPT:

(A)Professional subscription
(B)Mortgage loan Interest
(C)Research loan Interest
(D)Alimony payment

Ans: Research loan Interest



3).The carry forward loss relief principle allows losses to be carried forward to subsequent years and relieved only from profit of :

(A)Different sources
(B)New sources
(C)The same source the loss was incurred
(D)The actual source of same year

Ans: The same source the loss was incurred



4).On commencemet of business, the basis period for the 3rd year is on:

(A)On Preceding year basis
(B)Actual year basis
(C)The basis of the income of the 3rd yer
(D)Normal year basis

Ans: On Preceding year basis



5).In the case of conversion of partnership to a limited liability company, the __ rules will apply

(A)Commercement
(B)Change in accounting date
(C)conversion
(D)Cessation

Ans: Cessation



6).Where there is a merger of partnership, the older partnership will

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(A)Cease business
(B)Not cease business
(C)commence a new business
(D)change its accounting date

Ans: Not cease business



7).An individual that creates a trust either directly or indirectly is a:

(A)Trustee
(B)legatee
(C)Settler
(D)Annuitant

Ans: Settler



8).A change in the compositionn of partnership will arise on

(A)Death of a partner
(B)Cessation of the partnership business
(C)Commencement of the partnership business
(D)Retirement of a partner

Ans: Retirement of a partner



9).The current year loss relief principle allows losses to be relieved against ___

(A)Prior year profit
(B)Current year profit
(C)Next year profit
(D)Actual year profit

Ans: Prior year profit



10).The period for which the entity pays its tax on earned income is


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(A)Accounting year
(B)Accounting period
(C)Assessment year
(D)Basis period

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